Ryan Chaw: How to Invest in Real Estate

Chris Albert 00:00:00 (link to this point)

You know, one of the things I'm always saying is that if this country is gonna get better, if this country is gonna go on the right path, we have to step up as a community. Veterans are the sleeping giant in this country, and it is time for us to step up. That's why I wanna talk to you about The Citadel, the Military College of South Carolina. Now you might have thought about The Citadel in the past as this corps of cadets, this military institution, but they have programs for veterans that don't involve you joining the corps of cadets, don't involve you wearing a uniform every day, and don't involve you living a military lifestyle. If you wanna do that, great.

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This is Chris Albert, and I'm here to remind you of one thing. Someday, you're going to die. And that's not some morbid statement or scary idea. It's solid fact. Your time here on this earth is limited.

And we need to be reminded of this as much as possible with one simple reason, to live your best life while you can. This is the Warrior Soul podcast. What is going on, everybody? Welcome to the Warrior Soul podcast. My name is Chris Albert, and this is where we deliver tools, tactics, strategies, and ideas to help The US military veteran community and anybody else willing to listen to live their absolute best lives.

I have a great guest for you today, and this is something that I've become more and more interested in. I think it's a great vehicle for veterans, particularly because of the VA loan, but we're gonna be talking about real estate investing. And my guest today, Chaw, he's been on a bunch of the real estate podcasts. He's been on BiggerPockets. He's a pharmacist, but what he's done is he's got a full time job, everything like that, nine to five, working every day, and he's investing in real estate.

And this is something, like I said, this is something I've been trying to get into as much as it can this year. I I bought my first property. I was able to use my VA home loan. I I, you know, was really, really enjoying that process, and I'm in the process of of trying to buy more. And, you know, anything I get into, I wanna talk to you guys about too.

Not that I'm an expert in any of this. I am a dumbass when when compared to a lot of people, including my guest today, mister Ryan Chaw. Ryan is awesome. He's a great dude. He sincerely wants to help people to learn about real estate investing, and, you know, he's getting into talking to others about what he's been doing, which is buying property, holding on to it, charging a rent to people for living in that property, and cash flowing on everything.

So you guys will be sure to get a lot out of today's conversation, And, I will have all the links up to Ryan's stuff on the show notes for this episode. So let's get into it with mister Ryan Chaw. Ryan Chaw, welcome to Warrior Soul podcast. How you doing, man?

Ryan Chaw 00:06:39 (link to this point)

How's it going, Christopher? Appreciate you inviting me on the podcast.

Chris Albert 00:06:43 (link to this point)

Yeah, man. I heard you on BiggerPockets probably, probably I think a month ago or something like that. I was listening to it on the way home, heard a bit about your story, but for the audience at home, could you give us kind of like a five minute or two to three minute synopsis of who you are, where you're coming from, what you do?

Ryan Chaw 00:07:05 (link to this point)

Yeah, for sure. So I'm actually a pharmacist in California. I built up my rental portfolio on the side over the course of four years. I was able to build it to a 6 figure kind of business. It makes $10,755 per month in rental income.

I was actually inspired to get into real estate from my grandpa. He bought a couple properties in the San Francisco Bay Area back in the fifties before Silicon Valley was even a thing. And then as we know, when Silicon Valley was created, the house prices went skyrocketed. Rents went up like crazy as well. And so grandpa Chaw was able to retire, as a multimillionaire and, live comfortably off of the rental income.

And not only that, he was able to help cover some of my college tuition and that of my brother's as well. So I realized that real estate's one of the best ways to create generational wealth for your family. That's why I got into it as soon as possible, right, when I graduated as a pharmacist in 2015.

Chris Albert 00:08:05 (link to this point)

That's awesome. That's awesome. So, you know, right off the bat, the big question for you living in the state of California, I used to live in the state of California. You know, I think the first people think when they think California is really expensive place, with a lot of tax implications and things like that. When you decided to get into real estate investing, did you choose the area you are living in just because you are in that area or did you look around, did you think about those types of implications?

Ryan Chaw 00:08:44 (link to this point)

Yeah, so I actually went to college in Stockton and I got this idea from my friend in in college. He basically, what he did is he house hacked. He rented he stayed in a room a bedroom, and then he rented out all the other bedrooms to college students, his college buddies, and he was able to pay for the mortgage from the rent he collected from his college buddies. And I decided, hey. I can do this.

You know? So once I graduated as a pharmacist, I bought my first property in Stockton as well. Right next to the college, it was a $262,000 house, three bed, two bath. And the price to, rental income ratio just made a lot of sense. So the return on investment was really high for me because I was able to rent out by the bedroom, and I was able to also put in extra bedrooms where possible, like, by putting up some drywall.

And because I did that, I was able to double the amount of rental income I could be making on the property, based off of estimates on Zillow and rentometer.com. I was basically doubling that rental income because I rent out each bedroom for about 600 to $700 per per room, which makes around 2,500 to $3,100 in rental income.

Chris Albert 00:09:55 (link to this point)

Wow. Wow. Let you know, let's let's take a step back here and let's, kind of define a few things because, you I think a lot of people when they think about real estate investing, think about like, the flipper shows you see on TV and things like that. What you're talking about here is more like cash flow investing and maybe we want to define those terms like, what's the difference between what you're doing versus like flipping versus and what is a house hack, for example, that kind of stuff.

Ryan Chaw 00:10:25 (link to this point)

Yeah. So for flippers, that's a form of active income. So active income is where you have to put a lot of work in, your time in, in order to make the amount of income that you're making. And the unfortunate part about that is you're taxed a lot more heavily. So flippers, they have self employment tax as well as the regular income tax that they have to pay.

So even though you flip a property, you make maybe $50,000 on it, you're actually only getting half of that $25,000 because you have to pay a lot of those taxes. Versus what I do is called buy and hold investing. It's a form of passive income where you buy the property, then you rent it out. And that rental income, you could deduct a lot of your expenses, something called depreciation. You can deduct a lot from your taxes, and, basically, you don't have to pay as too much taxes on that rental income.

Other things you could deduct are, like, your interest. Right? You can also deduct, like, your phone and Internet bill. If you need to, like, contact your tenants through email or through your phone, then you could deduct that because it's a necessary part of your business. And so most people build wealth through several mechanisms in buy and hold investing, not just the tax implications, but also depreciation on the property, the fact that rents go up over time, and then it hedges against inflation too because your rent your mortgage payment will stay the same.

Like, let's say you take out mortgage for a thousand dollars a month, but the prices, like, the value of money goes down, so you're paying back your mortgage in cheaper dollars. So I take the iPhone analogy, for instance. An iPhone now is worth a thousand dollars, but let's say in the future with inflation, now it's worth $2,000. Well, if you sell that same iPhone for $2,000, you pay for two months worth of your mortgage. It's a thousand dollar mortgage versus now it would only pay for a one month worth of mortgage.

So basically, over time, your mortgages get easier and easier to pay back.

Chris Albert 00:12:23 (link to this point)

Right. Right. And let's talk about that for a second. So let me give you an example here. Let's say somebody is sticking all their money into a savings account, which yielding like 3%, something like that. What's what's the danger in that?

Ryan Chaw 00:12:40 (link to this point)

So inflation is about two or 3% per year. So yes, if you do make 3% interest, you're basically keeping at the level of inflation, you're not really gaining versus something like, you know, real estate or maybe even stock market investing. Right? You have a a return of at least 7%, 10%, 12%. So that beats inflation.

And you can keep reinvesting that money as well, especially in real estate without being taxed on it to grow your portfolio and grow your passive income.

Chris Albert 00:13:15 (link to this point)

Right, right. No, definitely. Think and I think that's something that a lot of people need to learn, right? If you're just stocking your money away, if inflation is going up, then the value of that money is decreasing over time, especially now, the way they're paying all these stimulus checks and things like that is they're printing a lot of money. So there's gonna be more money And out the value of that money is gonna keep going

Ryan Chaw 00:13:39 (link to this point)

Exactly. So as the money supply increases, what they do, what they call quantitative easing right now over the long term that leads to inflation, the value of the money going down, value of each dollar going down, because they're just printing more dollars. Right.

Chris Albert 00:13:55 (link to this point)

So when you decided to get into this, you know, what I know you said your grandfather was doing this for a bit. What kinds of fears did you have when you first started?

Ryan Chaw 00:14:11 (link to this point)

Oh, I mean, I had everything. I was afraid I wasn't going to get a renter. I was afraid that I had no idea what I was doing. Like I didn't have any knowledge getting started. So I just kind of wanted to get started because I knew in the long run real estate would work for me.

But I had a lot of problems actually that and a lot of fears that came true too. Like, these aren't, like, fears that aren't gonna happen. They're they're fears that could happen for sure. But what I did is I learned from my mistakes. I made the mistakes, and I learned and strategized, okay.

How can I, like, overcome this mistake? How can I do this better for next time? So for instance, on my very first rental, I actually lost $30,000. One of the reasons was because I had a vacancy for eight months because I didn't know how to advertise. I just put a sign on my lawn saying for rent, and I would just get a bunch of random people calling me, and none of them were college students.

So I learned that I have to advertise in the right places. Because if you advertise in the wrong place, it's like fishing in an empty pond or you're, you know, you're getting a lot of, low quality tenants or tenants that you don't you're not targeting in your marketing. Another thing that I should have done was I actually lost a lot of money because I got so I got this call one night from a tenant saying, dude, there's, like, sewage coming out of the kitchen sink. It's all over the floor now. Yeah.

And so I had to get a peanut through in there, like, at midnight. It was, like, 11PM on the weekend. Right? So I was paying premium price for that. I also had a plumber come in, assess the issue.

Turns out there is a a huge break in the sewage line, so I had to replace the whole line, with PVC pipe that cost me about $9,000. And I realized that I could have done the sewage line inspection where they put a snake down the pipe. It was basically a camera down the pipe to check if there's any breaks or cracks. And I could have saved myself, like, $9,000 by simply negotiating that during the the deal phase, escrow phase of the house. And so I yes.

I did make mistakes. Yes. These fears are legitimate, but there's also, like, okay. That empowerment where you have to figure out how to get past this obstacle and what you can do to optimize this for the next time around. And that's what really led me to scale so quickly is because I learned from my mistakes.

I learned, what to look out for on every deal that I purchased.

Chris Albert 00:16:37 (link to this point)

Right, and we will talk about this in a little bit. For this audience, a lot of them would be using VA home loans, which actually require a very strict inspection process before you actually get into them. You know, you're required to do it, I don't think the scope is actually scope in the pipes is actually a necessity, but it's definitely something that will be suggested to you along the way because you're going to be required to get this inspection done. But you know, I think with something like this, anything that's foreign is always going to have fear attached to it. And one of the things to remember is that there's other human beings out there who are doing this right now, who don't necessarily have all the background or education to do it, which means it's possible to do, right?

If you're out there and you're doing this, there's definitely possibilities. I mentioned you being in California at the time, right? And are still in California, you're investing in California, and you're obviously making money doing it. You know, one of the things I want to mention here as far as in terms of cash flow is how are you structuring your analysis of your properties so that you know you're gonna make money off of them afterwards or after you actually acquire them and start taking in rents?

Ryan Chaw 00:18:02 (link to this point)

That's a very good question. There's something out there called the 1% rule. And I don't recommend this for everything. It's just kind of a guideline mainly. So 1% rule basically means that your rental income is 1% of the total price you pay for the property.

So, like, let's say you buy a $200,000 house, that means you should be making $2,000 per month in rental income to meet that 1% rule. Another way you can do that is, take out a deal analysis calculator, which basically, you figure out how much you're paying for in the mortgage. And let's say the mortgage is 2,000 like, $1,000 per month, and then your rental income is $2,000 per month. Well, let's say you have, like, $500 per month paid toward repairs and taxes and all that. Well, then your what we call cash flow is 500 because we take 2,000 minus the thousand minus the 500 in expenses, and whatever is left is called your cash flow per month.

And so what you wanna do is figure out your annual cash flow and then divide that by the price of the property, and that gives you, like, a return on investment called the cap rate. And, I mean, if you guys really wanna look into a kind of Google cap rates, there's another measure called cash on cash return, and those are several ways to measure what your return on investment is. But for, like, a newbie investor, you can totally use that 1% rule because it's the it's probably the easiest way to go about it.

Chris Albert 00:19:32 (link to this point)

Right, right. And there's a lot of different calculators out there. I know BiggerPockets has a calculator that people can use. One of the things to mention here is that when you're actually doing your calculations, make sure you're including taxes and insurance in the calculations along with a bunch of others capital expenditures, you know, accounting for maintenance, accounting for vacancy rates and things like that. It's not just going to be your mortgage payment.

That's got to be covered under expenses, right?

Ryan Chaw 00:20:02 (link to this point)

Yeah, that's correct. Yeah. And BiggerPockets does a really good job of explaining like capital expenditures, vacancy rates and insurance and all that.

Chris Albert 00:20:12 (link to this point)

It's cool. It's cool. So, you know, there's a there's a million things that people have probably heard about being a landlord, right? Like getting those phone calls that you mentioned at, you know, midnight, dealing with broken toilets, that kind of stuff. How do you get around that?

If you want this to be a truly passive investment, how do you get around that kind of thing?

Ryan Chaw 00:20:38 (link to this point)

Yeah, so that's where systems and teams comes in. So creating like a team of contractors that you can rely on for everything that could possibly come up on the house. So like I have a guy who, you know, if the toilet breaks down, he's good for that. I have a guy for flooring. I have a guy for if I want to put up some drywall and create an extra bedroom, he's an expert on that.

He's done it many times before, right? So basically, kind of your connections that you create allows you to have access to that expert advice. So when something like that does come up, you know exactly who to turn to. So nowadays, I get like, if something went wrong, like maybe there's a broken toilet, the tenant would text me, I'll forward it to the proper contractor, that contractor will let himself in using the electronic cone on the door, right? And then he would get the job done.

I'll have someone check his work, and then he'll send me a bill and I'll send him a check. And that's, you know, less than an hour of my time, pretty much, just doing that because I have like a little, you know, a system in place for it.

Chris Albert 00:21:43 (link to this point)

Right. Awesome. That's awesome. So actually dealing with that. And then there's actually, you know, professional property managers, can go with that, will take a percentage of rent, that kind of thing, right?

Ryan Chaw 00:21:56 (link to this point)

Yeah, so I actually self manage my property. I have 17 tenants that's making $10,755 per month in rental income, and I'm still able to do this while I work as a full time pharmacist because, again, once you establish those systems and create that team in place, then everything becomes automated and then it basically becomes true passive income. It's a hands off process. I spend less than an hour a week managing my properties, even though I have 17 tenants. And that's a lot to do with like screening the tenants as well, making sure you choose high quality tenants who kind of can take responsibility for certain tasks around the house and can take care of themselves, right?

Not someone who's really needy, and is always needing the landlord to pick up slack and do things for them.

Chris Albert 00:22:44 (link to this point)

Yeah, let's talk about the screening process. Know, that's a really important thing to think about, you know, you don't want to just take the first person that's, that's going to come up and everything. I mean, of course, there are certain laws that you have to follow. If a person's qualified, you do have to, you have to grant them tenancy, right? But, but, you know, how do you go about picking the proper people to come into your properties?

Ryan Chaw 00:23:11 (link to this point)

Yeah, so that's a great question. There are anti discrimination laws out there. The federal fair housing laws, if you want to look those up, basically saying you can't discriminate based off of age, sex, race, national origin, that type of stuff. But I have this system, I call it the PRIME system that I teach my mentees how to find high quality tenants. So the P in PRIME stands for placement of advertisements.

So you want to place your ads in the right place. Remember how I basically put a For Rent sign on my lawn and I got a lot of unqualified tenants. Well, where I go is I go where the college tenants hang out. So like the college bulletin boards, Facebook housing groups, Craigslist sometimes, and just kind of getting creative and figuring out where they hang out and then placing my ads there. Because like I said, putting your ads in a place where they're not hanging out is like fishing in an empty pond and you don't want that.

So R stands for reviewing social media. So I usually screen their Facebook profile, their Instagram. It's kind of like how employers are now screening like employees through Facebook as well. You kind of see what type of person they are based off of what they post, you know, are they someone in parties all the time who has a lot of pictures of them drinking alcohol, getting drunk, smoking, or doing drugs, or going to raves or stuff like that, well, maybe not the best type of tenant. And maybe they're a good person, but they might not be the best tenant for the house, right?

I stands for identifying the type of tenant they are from your interactions with them. So that's like, if they are always asking for like cheaper rent, are they someone who seems to be difficult to communicate with? Do they seem needy? Are they asking for things before they even sign a lease? You know, that type of stuff.

M stands for measuring responsiveness. So that's the more responsive they are, the more responsible they probably are. If they're getting back to you with their proof of income and paperwork a lot faster, like within a couple days, then they're probably going to be pretty responsible down the line when you ask them to pay like late rent, you know? And then E stands for ensuring proof of income, which is the final step. You just have to make sure that their parents or they can pay their loan with a student loan.

I accept like financial aid papers. Or usually what I do is I check the last two month bank statements and FICO score of the parent. And that kind of ensures you never get late rent or unpaid rent. The other thing is the parent, there's no parent out there who's not going to pay their child's rent and risk their child getting evicted from their place they're staying at college, right? So I've never had to deal with unpaid rent or evictions, which is the really cool part about renting to college students.

Not only there's a huge market because the student is only paying like $600 versus $1,200 for college dormitories, they get more privacy and they don't have to pay for a meal plan, but also, you know, it's great because the parents are taking care of their kids, they're paying the rent, they're also sometimes coming over and helping clean up after their child, or you know, I've had parents like literally vacuum the whole house when they come over to visit.

Chris Albert 00:26:29 (link to this point)

Oh, Yeah, I think my mom would whip my ass if I ever asked her to do that. Yeah, that's pretty awesome, but you bring up a good point there is that when you're getting into this, it is a business, so you want to find a good target market or niche that's going to work for you, right? So you've got college students, there's military bases, the area around military bases, trying to rent out active duty military members. You can pick the geographic areas so that you're not necessarily inside of the city, but right next to a city so you can pick up the commuters, that kind of stuff, right?

Ryan Chaw 00:27:10 (link to this point)

Yeah, exactly. So investing anywhere near like military bases, college towns, what else, like big companies, big name companies, hospitals, getting hospital workers are all great strategies for just choosing the right location.

Chris Albert 00:27:26 (link to this point)

That's awesome. That's awesome. You know, so and I just want to again emphasize this because I just went through this and finding tenants is, you know, don't jump on the first tenant you try to deck, first person that messages you over Facebook and says, hey, I want it. The cost of evicting a tenant definitely be a lot more than spending a little bit of extra time and screening properly and making sure that are getting the right person in there.

Ryan Chaw 00:28:04 (link to this point)

Yeah, exactly. And that's not including like the mental cost of it to the headaches that you have to deal with. You have to worry about it stresses you out. It's taking away from other things you want to do in life, you know.

Chris Albert 00:28:16 (link to this point)

Right. Exactly. Exactly. Let's talk about like finding deals, trying to figure out what properties you want to invest in. How do you find your deals?

How do you go about that?

Ryan Chaw 00:28:28 (link to this point)

Yeah, so I usually look for any colleges around within a one hour driving distance of my current place. This is just like just to set it up. You might have to drive out thirty minutes up to an hour just to make sure you're in a city that has affordable housing. Once everything is set up, like everything's automated, like for instance, I haven't visited my properties for a year and a half now. Last time I visited was just to help move in some furniture to my fourth property.

But after that, you know, everything can be automated through your systems and your teams as long as you set those up. You want to make sure the most important thing is you want to make sure that there's cash flow. So you have to make sure you buy a property that's cheap enough so that the mortgage on it is obviously significantly less than the rental income that you could be making on it. I also target colleges that are more like Ivy League type colleges, colleges that are harder to get into, so that the students who I rent to are more like straight A students, they're studious, they're serious about getting their degree, you know, they're serious about promoting, like, you know, when they get out into the workforce, they're serious about getting their promotions, being the top of class, all that type of stuff. So I do invest specifically in those types of colleges.

Chris Albert 00:29:50 (link to this point)

Nice, nice, no keg stands, nothing like that on the social media, right?

Ryan Chaw 00:29:54 (link to this point)

Yeah. No, like freeloaders. Target, yeah, mainly people who are very serious about their academic growth, personal growth, that type of stuff.

Chris Albert 00:30:04 (link to this point)

Awesome. And so when you're searching for deals, are you searching on like a computer? Are you on Zillow? Are you on Facebook? That kind of stuff?

Ryan Chaw 00:30:14 (link to this point)

Yeah, I actually recommend getting a local real estate agent because they know the market best, they know exactly what houses they're selling for, what looks like a good deal in that market, which neighborhoods to avoid because of safety or security concerns. And they really give you that personal insight you need into that market and help you kind of, it's a good base to build your team, because maybe they know some contractors in the area that do flooring or put up, you know, drywall, they know landscapers, they you know, lenders maybe. So I always recommend starting with a real estate agent, and they can send you MLS listings directly to your email box. The other thing I do, of course, is I scour Zillow and Redfin, and just see, you know, constantly look through, okay, what are things selling for? What can I get for what's what really makes a good deal in that market?

Chris Albert 00:31:09 (link to this point)

So what, what about financing? So you mentioned you have 17 deals right now or 17 properties right now or 17.

Ryan Chaw 00:31:20 (link to this point)

So this is the cool part about this method. Actually only have four single family homes.

Chris Albert 00:31:25 (link to this point)

Gotcha.

Ryan Chaw 00:31:25 (link to this point)

That is making that $10,755 per month. That's because I rent out by the bedroom. So it's like kind of turning a single family into a multi unit property. And that's where the profit comes from. Sorry, can you restate your question?

Chris Albert 00:31:44 (link to this point)

No, no, that's what I was thinking about. Because you mentioned 17 tenants, and I was thinking 17 properties. But the reality is you have four houses. And because you're in the niche you are in, that your tenants don't mind living with each other. So you have really like a true alternative to the dorms and these campuses, right?

Ryan Chaw 00:32:04 (link to this point)

Oh, yeah, exactly. Like I said, it is like they are paying half the price. They don't have to pay for a meal plan. So for a lot of them, it makes a lot of sense. Whenever I put like an ad up on the Facebook group, I would say within three days, get 12 people contacting me because it's just a huge market.

A lot of people are looking to save money and to live off campus versus the dormitories, which are charging like $1,200 a month.

Chris Albert 00:32:30 (link to this point)

Yeah, yeah, that's awesome. The And question I have was with financing, right? So you've been able to secure four of these. You know, how did you go about that? Is it through traditional mortgage?

Are you doing any other types of financing or anything like that?

Ryan Chaw 00:32:47 (link to this point)

Yeah, so most of my financing is conventional financing, but I did take something out called a HELOC on the first property. The sad part about the first property was obviously I lost over $30,000 but the upside of that was the house went up in price by $60,000 It appreciated because I put in so much stuff. I put in a new HVAC system, I created the extra bedroom, all that. And so it went up $60,000 and I was able to take that money out and access it using something called a home equity line of credit, which is basically like a low interest rate credit card. You're paying maybe 5% or 6% interest on it.

It depends on what the federal prime rate is, but it's super low. So you have access to that $60,000 that you can put as a down payment on another property and you can really leverage your money. Let's say you're making a return on investment of 15% on that you know, cash on cash return for that $60,000 then it just makes sense to take out that money as a HELOC and buy another property because you're making a 15% return and only paying a 5% interest rate, that's overall a 10% return.

Chris Albert 00:33:58 (link to this point)

That's awesome. And I want to see specifically for this audience with financing is we have this awesome thing called the VA loan, right? And I'll give you an example, you know, I just moved to Florida, I bought a house, house was $340,000, put my earnest money down, but literally did not have much more than that I actually got money back at closing. Right? So like, you could do no money down very easily as a veteran and still be able to, you know, and get a pretty nice house with using leverage, right?

I don't recommend that for like everybody, it has to be a good deal. You have to make sure you're getting cash flow because the payment is going be higher, but, you know, it's an option that we have as veterans and it's something that makes the veteran community particularly apt for, this type of, investing.

Ryan Chaw 00:35:01 (link to this point)

Oh yeah, exactly. The VA really takes care of the veterans. The other thing is something called BAH, which is the basic allowance for housing, which is payments they just pay you on a monthly basis to locate out of the military.

Chris Albert 00:35:16 (link to this point)

Yeah, that's if you're an active duty military member.

Ryan Chaw 00:35:18 (link to this point)

Yeah, If you're still on active duty, right?

Chris Albert 00:35:23 (link to this point)

Yeah, I think I just think the VA loan is a great option. You do have to be the first resident of record at the home. So like you do, it works well for what we call house hacking, which will define in a second. Like, you know, if you're going to live in a home and you want to rent part of that place out, it will be a great opportunity for you. To define house hacking for the audience real quick.

Ryan Chaw 00:35:50 (link to this point)

Oh yeah, for sure. So house hacking is where you actually can put a very low down payment, especially for veterans, but potentially 0% down payment, right? And you basically live in a bedroom for at least a year and you rent out the other bedrooms. And so you're really leveraging the, cash that you're putting into that property and your your roommates are basically paying the mortgage down for you. That's why it's called house hacking.

Chris Albert 00:36:18 (link to this point)

Right, right. So like, that's what I'm doing right now. I was able to find a single family home and that had an efficiency in the back. And my fiance and I were living in the efficiency. And then we're renting out the single family home and that completely covers the mortgage.

So we're basically living for free, rent free, mortgage free, that kind of stuff.

Ryan Chaw 00:36:39 (link to this point)

Yeah, and people do this for like duplexes, triplexes as well. So you can still have that privacy, live in one unit, and then just rent out the other units. And as long as you can cover the mortgage payment with that rental income, it makes a whole lot more sense than renting renting yourself to stay out of place because you're not paying any rent. You you know that rent goes up over time. Your house or property prices go up over time and you take advantage of those tax benefits.

So anyone who's not house hacking, I would highly recommend trying it or considering it.

Chris Albert 00:37:13 (link to this point)

Right, right and then I mean, few of the other things like one, people are you're building that equity as people are paying the rent. Two, you're saving so much money and that's money that can go to a future investment. That's money that can go anywhere, go into your IRA, that kind of stuff.

Ryan Chaw 00:37:33 (link to this point)

Yeah, definitely. And this is not just for veterans as well. There's also something called an FHA loan for anyone else. Right? You can put as low as a 3.5% down payment and do a house hack using an FHA loan. So there's tons of options for that.

Chris Albert 00:37:50 (link to this point)

Right. Right. Absolutely. And the other cool part about a VA loan that I've learned is that you some people think you can only have one and you can only have like a certain amount at a time, right? So if you use your VA home loan, and let's say you build a little bit of equity in it, and then you refinance out of that loan, you could use that VA home loan again.

Ryan Chaw 00:38:18 (link to this point)

Yeah, exactly. That's probably one of the biggest strategies out there is once you have enough equity on a property, you refinance it and then you reuse that VA loan. I think there's also an allowance for a second home, like a vacation home, but I'm not 100% sure there, but yeah, take advantage of those.

Chris Albert 00:38:35 (link to this point)

Yeah, absolutely. So you've done this, getting it now you're getting into mentoring. Can you tell me a little bit about that?

Ryan Chaw 00:38:43 (link to this point)

And and Yeah. So I teach the student housing method, because I realize it's probably one of the best ways for newbies to get into real estate investing because you already have the profit makes sense and pretty much everywhere in The United States, because you're doubling your rental income that you could be getting per house. It's a win win situation also because, you know, the students are getting cheaper housing than on campus housing. You're, you know, you're increasing your profit for yourself, and you're you're able to provide out, you know, jobs for contractors and all that. So, you know, I was really passionate about what I'm doing, so I started teaching others how to do it as well.

For those who are interested, I do offer a free PDF, and I could just mention it here. It basically goes over if you're a newbie real estate investor, where are the different areas out there? And then it goes through the housing, the student housing strategy that I use in more detail. And you can access that through my website. It's at www.newbierealestateinvesting.com.

That's www.newbierealestateinvesting.com and newbie is spelled n e w b I.

Chris Albert 00:39:58 (link to this point)

Awesome. Awesome.

Ryan Chaw 00:39:59 (link to this point)

Basically, again, like I walked everyone through agency, the whole deal analysis process so that they don't have to make the same mistakes that I did on my first property.

Chris Albert 00:40:10 (link to this point)

Absolutely. That's so important. I mean, there's a lot of resources out there. And here's the thing. We're almost in a time and place where there's too much information out there.

So like, if you go and you Google like real estate investing right now, you will probably get some good research, but then there is going to be other resources out there that are like, a million dollars in a week or something like that. And it is good to know when you have somebody who is out there who is actually doing it like Ryan is. You want to learn from that person. You do not want to learn from the guy who is making all his money off of an online course or something like that. You want people who are actually doing this.

Is awesome that you are putting that out there, Ryan.

Ryan Chaw 00:40:57 (link to this point)

Yeah, I really recommend for anyone who wants to get started in real estate investing, yeah, find a mentor. Like if you want to get into flipping, find someone who's done like ten, twenty flips. If you want to get into apartment investing, find someone who owns a couple apartments. You wanted to get into student housing, you know, I teach that. So that that type of thing, you know, really finding a mentor can, squeeze the amount of time it takes for you to become successful in this area.

And it could lead you to, of course, avoid a lot of the common errors and also get into the mindset of a real what a real estate investor kind of has or has to develop over time because there's a certain mindset that That's like real estate invest like successful real estate investors apart from someone who just kind of gets in and things aren't working. And so they quit.

Chris Albert 00:41:48 (link to this point)

Awesome. Awesome. Well, Ryan, one, I want I want to thank you for coming on here today. You know, I think this is something that we in this community, we really need to think about. Not only how we are doing right now, but what are we doing for the future?

How are we building ourselves up? And one of the things I always say on the show is that if we want to change the world, if we want to make things better, we've got to be in a position to be able to do so. Wise investing, making sure you're smart with your money, putting yourself into a position where you can take care of yourself, is probably the number one thing you should be doing before you start trying to worry about, the impact you're going have on the world.

Ryan Chaw 00:42:40 (link to this point)

Yeah. So I reckon, know, it's kind of like some people will say, like, oh, money isn't everything or whatever, or, you know, I'd rather spend time with my family. What I say to that is, you know, get your money game right so you can spend more time with your family. Those are the same people who work forty hours a week away from their family you know, it's it's really about not just about like making Building this wealth. It's about getting the money game right so that you can make that bigger impact on the world.

Help yourself first and then, you know, so you can help others, you know?

Chris Albert 00:43:12 (link to this point)

Right. Exactly. Exactly. Well, that's awesome. Do you have anything else for the audience before we, before we sign off?

Ryan Chaw 00:43:21 (link to this point)

No, I mean, I would say it's very intimidating to get started, obviously. But the biggest thing is just to take action. There's something called ready, fire, aim, which usually we say ready, aim, fire. Right. But instead what you want to do is ready yourself, just fire first, buy your first property and then figure it out along the way.

And of course, help hiring mentor or just finding someone who's done it before helps out of course, for sure. But also just having that mentality that there will be obstacles that come up, there will be problems, but I'm going to figure out how to solve them along the way. Not, not everything's going to be perfect before I get started.

Chris Albert 00:44:02 (link to this point)

Absolutely, you can't wait for things to be perfect before you go. You gotta take some action and when it comes to self confidence, the best way to build confidence is by actually doing something, right?

Ryan Chaw 00:44:14 (link to this point)

Yeah, and I hope I inspired some of you guys to take action because I was just a normal W-two worker and I was able to build this thing up on the side and it doesn't take as much time as you guys think once you set it up.

Chris Albert 00:44:28 (link to this point)

Absolutely. Absolutely. Well, again, Ryan, man, I want to thank you. I want to acknowledge you for taking action in your life and actually getting out there to tell other people about it. And can you see that website one more time that people can go to?

Ryan Chaw 00:44:42 (link to this point)

Oh yeah, for sure. For anyone who wants to connect with me, also get those free resources. I also have like a deal analysis calculator for you guys as well. It's at www.newbierealestateinvesting.com and newbie is spelled n e w b I e.

Chris Albert 00:45:00 (link to this point)

Awesome. Awesome. And are you on social media at all? Yeah.

Ryan Chaw 00:45:04 (link to this point)

I do have like a Facebook group. It's called newbie real estate investors. I'm on Instagram. If you want to connect with me, it's at Chaw Chaw. That's C A O C A O eight eight eight eight.

Chris Albert 00:45:18 (link to this point)

Awesome. Awesome. Well, thanks a lot, Ryan. To everybody out there, you know, listening to these podcasts is one thing, but also go out there and take action and maybe start with small actions. Maybe get on there, start analyzing some deals, go Ryan's website, check out his deal calculators, see how that works and find yourself a real estate agent.

Start looking around there, there's so much that you can do here in this space and right now is as good as the time is in. With that guys, I wanna thank you so much for listening. This is Chris Albert with the Warrior Soul podcast, Ryan Chaw, and we are out. Alright, guys. I hope you enjoyed that episode with mister Ryan Chaw.

I'm gonna get all the links to Ryan and everything he's doing up on the show notes for this episode. Listen, guys. I I have this episode for a reason. It's because I think we in this community are uniquely positioned to be able to invest in real estate, And I think it's something that could help us to build wealth. And one of the things I'm always telling you guys about is, you know, if we're gonna make this world a better place, we have to make us better.

We have to build our position. And, you know, you might like to think that money isn't everything, and it's not. I don't believe money is everything, but it's a big part in making sure that we're secure enough and able enough to exact change here on this planet. So hope you guys take advantage of this. I hope you guys definitely check out mister Chaw, and I hope you guys definitely take action on your own.

With that, guys, we'll be back at you next week with some more awesome content. My name is Chris Albert, and this is the Warrior Soul podcast.